Year-End Tax Planning Tips for Minimizing AMT

More and more taxpayers are subject to the Alternative Minimum Tax. The AMT is a secondary tax system designed to prevent high-income taxpayers from taking too many tax deductions. My colleagues not-too-jokingly call this the "alternative maximum tax," since taxpayers pay the higher of the regular tax or the AMT. Here's how the Ernst & Young Tax Guide describes the AMT:

"The simplest way to understand the AMT is to think of it as a separate tax system with its own allowable deductions and exclusions, many of which are different from those allowed for regular income tax purposes." (Page 461)

Fortunately for us, Gina Gwozdz, CPA, has posted 7 tips for keeping your AMT in check. These year-end tax strategies often sound counter-intuitive, and focus exclusively on reducing your AMT tax bill instead of your regular tax.